I was wrong…or at least forgetful.

Vernon Hill had slipped my mind!

In last Thursday’s blog about differentiation, I made the bold statement that I found it very difficult to name one bank that has done a great job of differentiating itself in any meaningful way.

After posting my blog and leaving the house, my memory lapse ended.  I made a mental note to correct myself in my next blog – this one.

It wasn’t a career banker who did a great job of differentiating his bank – it was a former fast-food executive.

It’s my belief that Vernon Hill established – and holds – the differentiation benchmark for consumer banking.  He did it with Commerce Bank, a bank Hill founded in New Jersey.

As you’ll discover below, Hill lost control of Commerce Bank several years ago but the good news is it is now known as TD Bank, having been acquired by Canada’s Toronto-Dominion Bank in October 2007.

Fortunately for Commerce Bank’s loyal customers, the only major change made by the folks at TD Bank is the bank name.

I presented Hill’s story in the November, 2010 issue of the ACTON Marketing monthly newsletter.  Below is that story with a bit of updating.

Using experience gained from his fast-food restaurant background, Commerce founder Vernon Hill took branch innovation and customer service to entirely new levels.

He created and ran his branches much like fast food outlets.

Unlike most innovative banks that focus on one major point of differentiation, Hill focused on several.

Selecting the tagline, “America’s Most Convenient Bank,” Hill delivered his “convenience” point of differentiation by…

• Having brick and mortar branches open longer hours and seven days a week.
• Issuing ATM cards in the branch at the time a new checking account is opened.
• Providing the branded “Penny Arcade” coin counting machines in every branch which are available to both customers and non-customers without a fee.
• Ensuring employees provided excellent customer service through the bank’s internal WOW program.  You can visit TD Bank’s wow zone here.

Owning the convenience point of differentiation was easy for Vernon Hill as he didn’t have to completely revamp an existing bank’s approach to business.

You see, Hill founded his bank in Cherry Hill, New Jersey, in 1973, having previously helped McDonald’s founder Ray Kroc find store locations and later having been a very successful fast-food restaurant franchisee owner.

It was Hill’s fast-food experience that enabled him to realize that what was sorely missing in the retail banking business was all-around service and convenience – not only in hours and days open, but with instant gratification such as instant issuance of ATM cards and free coin-counting machines in every branch.

Additionally, Hill put together an internal program to ensure that every employee provides excellent customer service.  A Fast Company magazine article on the bank’s legendary customer service is available here.  A visit to the bank’s customer service center is described here.

Other points of differentiation include no-fee Visa Gift Cards for customers and dog biscuits in every lobby and drive-up.

In effect, Hill approached branch banking more like a retailer and less like a bank.  Growing from a single branch in 1973, to more than 435 branches by 2006, Hill’s bank developed a cult-like following in the markets served.

While a growing number of banks and credit unions provide coin counters inside the branches, most resemble an ATM and require the coins counted be deposited directly into an account.  And they are not available to non-customers.

Hill, on the other hand, took the generic coin-counter idea, branded it, and marketed it primarily to young children.  Resembling a video game, complete with video screen, Hill’s coin counters appeal to adults as well and have become famous in the markets previously served by Commerce Bank.

Unfortunately, in a rush to judgment, in 2007 the Comptroller of the Currency forced Hill to resign as CEO of Commerce Bank.  As it turns out, no charges were ever brought against Hill in the government’s investigation over questionable contracts.  This is the reason the bank was acquired by TD Bank.

And as mentioned above, senior management of TD Bank made a very wise business decision to retain the bank’s points of differentiation.

A couple of years ago, Vernon Hill was back in the news as he took his banking and marketing skills to Great Britain where he opened his first Metro Bank branch in London in 2010.  It is the first new bank license granted in Great Britain in 138 years.

Vernon and Shirley Hill

According to an in-depth article about Vernon Hill in Fortune magazine, the branch grand opening was typical Vernon Hill – complete with dancers, Dixieland bands, jugglers, plenty of free ice cream, and a lot of balloons.  Hill introduced a new era in consumer banking for the usually staid British – and they overwhelmingly appreciated it.

As of April, 2012, Hill’s Metro Bank has 11 locations.  You can visit the bank’s colorful and informative website here.  Touring the website is well worth your time as it, too, serves as a good example of website presentation.

Every bank marketer in America should be curious about Vernon Hill – the man who dared to be different by creating the fastest-growing consumer bank in the country.  Former fast-food executive Vernon Hill is a highly successful marketer who was forced to take his banking skills to England.  He continues to have much to teach us about consumer banking.

For a comprehensive article about Vernon Hill the fast-food expert turned consumer banker, you should consider reading Shawn Tulley’s Fortune article, “Vernon Hill Is The Best Damn Banker Alive,” here.

After reading the article I think you’ll agree that Vernon Hill has twice set the benchmark for differentiating a consumer bank.